SEOUL: North and South Korea held talks today on upgrading a joint business project despite tensions sparked by an artillery

barrage last week, as Seoul

said Pyongyang seemed to want better relations.

The two sides met at the Kaesong estate north of the border to discuss developing

the industrial park, days afte

r the North fired hundreds of shells into the sea near the tense disputed maritime border off the west coast. Last week’s firing — which Pyongyang described as a routine military drill — raised tensions between the neighbours who have remained technically at war since their 1950-1953 conflict.

But the communist state — which has long been

bitterly hostile to Seoul’s conservative government — appears to be changing its attitude, according to a Seoul presidential spokesman. “It is now trying to open dialogue with South Korea and the United States. I believe it feels the need for dialogue,” said spokesman Park Sun-Kyoo.

Park refused to confirm a report in Chosun Ilbo newspaper that the two sides held secret talks last November about a possible summit. But he told AFP there was no reason not to hold one if the North meets Seoul’s demands: that any summit should make practical progress in relations and that the nuclear issue must be discussed.

“We do not want meaningless talks like before,” Park said in reference to leaders’ meetings in 2000 and 2007. President Lee Myung-Bak revived summit speculation last week when he expressed willingness to meet North Korean leader Kim Jong-Il, possibly even this year.

“However, if we meet, we have to engage in fruitful dialogue and hold enough discussions on the North Korean nuclear issue,” Lee said in a BBC interview.

The North wants today’s talks at Kaesong to focus on a wage rise for the 42,000 North

Koreans who work at 110 South Korea-funded plants. It terms the current pay of 75 dollars a month including welfare payments as “very paltry”.

“The two sides discussed the issues of commuting, communications, customs, housing and other matters, but no consensus was reached,” a Seoul unification ministry official said.